Manufacturing data was robust. Regional data out of the New York and Philadelphia areas was exceptionally strong highlighted by the 45-year high for new orders in the Philly report. It is important to remember that the regional surveys are just that, surveys. They do not report actual manufacturing data and thus can be susceptible to sentiment and tend to be volatile. Actual manufacturing data, published by the Federal Reserve, reported a solid monthly manufacturing gain of 0.5%, led by business equipment, which helped offset declines in vehicle production.

On the surface, housing sector data was weaker in April.  Both housing starts and permits (a leading indicator of future activity) fell, down 3.7% and 1.8%, respectively, from March. However, some weakness was expected following very strong March readings. On a year-over-year basis, the data was more upbeat as both starts and permits rose, up 10.5% and 7.7%, respectively.

Consumer spending, as measured by retail sales, was largely in line with expectations, rising 0.3% in April. However, that represented a marked decrease from March when spending rose an adjusted, and arguably unsustainable, 0.8%.  Gasoline sales rose 0.8% in the month reflecting higher prices at the pump. At the end of April, the national average for unleaded gas stood at $2.81/gallon.  That represents a 5.6% increase from the end of March and a 19% increase from a year ago.  Further increases in prices, which are likely as we enter the busy summer driving season, could result in decreased discretionary spending by consumers.